On the eve of tomorrow's deadline for thejoining the Greek swap the pressure on investors is not easing. Greece has threatened not to pay private individuals who refuse to participate and who hold bonds under international law (14%), while those holding bonds under Greek law are already ready to trigger collective action clauses. A position that makes the market increasingly fear a default by Greece. The European stock exchanges they filed on a black tuesday: the Ftse Eb down by 3,39%, Frankfurt -3,4%, Paris -3,58% and London -1,86%. Sales also to Wall Street which after a bad opening confirmed the declines: the Dow Jones closed at -1,57%, at 12.759,15 points, the Nasdaq at -1,36%, at 2.910,32 points, and the S&P 500th -1,54 .1.343,36%, to XNUMX points. Bad session also for Tokyo this morning which still closed down by 0,64%, also penalized by the rise of the yen.
Along with Greece, several factors weighing on investors triggered the sell-off after the early 2012 rallies:
1) the recession in Europe leaves no room for positive surprises with the GDP of the Eurozone which dropped by 0,3% in the fourth quarter confirming the data published last February 15th. Italy confirms the drop of 0,7%. Fatal to investor confidence was China's revision of its 2012 growth targets to 7,5% from 8%.
2) Good news has not arrived from the Spanish front: Spain that will not be able to meet the deficit reduction objectives established with Europe and Madrid has increased the deficit target to 5,8% of GDP for 2012, from the initial 4,4%, thus fueling both fears on public finances and on growth.
3) the growing tensions between Israel and Iran and the threat of the oil rush are not helping. Even if the hope of new negotiations has cooled the increase and yesterday the WTI closed at 104,72 dollars a barrel.
Meanwhile the risks of new tensions within Germany in relation to European bailouts are increasing, also in view of the next European appointments (the Eurogroup is scheduled for Friday to take stock of the swap): according to the Bild newspaper, the Bundesbank, the German central bank which is the largest shareholder of the ECB, closed 2011 with the lowest profit in the last seven years due to provisions to cover the growing risks associated with bailouts in the euro area. The balance is 1 billion less than expected at 2,5 billion.
A Business Square the rise in the spread close to 330 basis points weighs heavily. Under pressure the banking sector. In sharp decline yesterday among the financial Bpm -5,92%, Bper -6,20% and Mps - 6,44%, the worst of the basket. Salvatore Mancuso, president of the Equinox Fund, confirmed the strong industrial interest in an important package of MPS shares. In the meantime, the Foundation has given the green light to the release proposal on the securities sent yesterday by Mediobanca and Crédit Suisse: the accepted plan first provides for the sale of the share (up to 15%) of the Sienese bank, with the deposit of the proceeds in a restricted fund in favor of all creditors and the subsequent distribution without privileges for anyone. Intesa yesterday sold 4,93% and Unicredit 5,18% at work on the new top. The meeting of the bank's governance committee is scheduled for today and a summit between the shareholder foundations, Cariverona, Crt and Carimonte, will take place in the late morning. Mediobanca ended up in the volatility auction yesterday, sinking by 5,63% in closing.
The entire Ligresti galaxy collapses on Black Tuesday. Premafin, under a flurry of suspensions, lost 9,39%, Fondiaria 9,75% and Milano Assicurazioni 7,49%. The agreement between the holding company and the creditor banks after yesterday's river meeting would be closer even if some institutions aim to evaluate the Arpe Meneguzzo offer as well, while Mediobanca aims to speed up the timescales on the Unipol-Fondiaria industrial project. Premafin also wrote to the directors of Fondiaria Sai to find out if they still deem such an important liquidity injection of 1,1 billion is still necessary.
THEcapital increase of 1 billion by Peugeot drags the sector down while the Geneva Motor Show opens. Fiat sells 6,07%, the third worst stock on the Ftse Mib. The confirmation of Opel's CEO has arrived from the Geneva Motor Show: Fiat keeps the table open with Opel for a possible "side" production cooperation of the agreement that the German company and its parent company General Motors have signed with Peugeot .
No one is saved on the Ftse Mib: they are all minus signs. With the markets closed, Barclays' no to the Seat reorganization arrives. The position of the British bank which owns 6% of the debt should not derail the bailout deal, with the number of accessions approaching the safe level. However, it represents a further stop that will require new negotiations. Barclays, in a letter sent to the CEO of Seat, said it was willing to discuss alternative solutions in line with the objectives. But the defection could spill over to other investors. In Barclays' line there would also be Geveran Investments which has 5% of the bank debt.
S&P's ax falls on Edison: the agency downgraded the long-term rating to BB+ from BBB- to non-investment. The short rating and stand alone credit profile also drops. S&P explains: "The downgrading reflects the ongoing delays in completing the shareholder reorganization which jeopardize the group's ability to secure the long-term financing needed to meet significant short-term commitments."
